Bangalore: Shares rose 1.2% on Wednesday, a day ahead of the expiry of monthly derivative contracts, buoyed by firm global markets, but volumes were slack as the year-end holiday season saw most investors staying light.
Hindustan Unilever Ltd (HUL) jumped 3.5% on a report in the Mint daily India’s largest maker of household products and consumer goods had put a property in Mumbai for sale. The asset was expected to fetch $49-$55 million, the report added.
Financial lenders rallied, aided by short selling ahead of the expiry, dealers said. Investors are upbeat about the sector on expectations India’s fast-growing economy will drive a strong loan demand.
The 30-share BSE index ended 1.15%, or 230.6 points, higher at 20,256.03 points, with 27 components gaining ground.
The main index is up almost 16% so far in 2010, mainly driven by foreign fund inflows, and most investors are optimistic a robust growth outlook for the Indian economy bodes well for the domestic equities market in 2011.
“I think the next year is going to be good,” said K.K. Mital, head of portfolio management services at Globe Capital. “Hiring is rising, this will raise consumption demand and savings. If further investment is coming into infrastructure, there will be growth.”
Foreign funds have been net sellers of about $500 million this month through Monday, but for the year, they have purchased a record $28.5 billion of Indian equities.
“By and large, there is nothing negative except that there have been some selling pressure from the foreign institutional investors’ (FII) side,” said R.K. Gupta, managing director at Taurus Asset Management.
“But FIIs have been more or less dormant recently,” he said, referring to the year-end holiday lull. “I feel markets will remain stable with an upward bias, but no big move (is expected) either way.”
On Wednesday, HDFC Bank rose 3.2% and mortgage lender Housing Development Finance Corp climbed 2.4%.
Top lender State Bank of India gained 0.9%, while No. 2 ICICI Bank added 1.3%.
Metal counters shone, reflecting a rally in global base metal prices on a weaker dollar, dealers said. Aluminium and copper producer Hindalco Industries gained 1.7%, while Sterlite firmed 3.4%.
India’s top mobile operator Bharti Airtel rose 3.5% on Wednesday after adding very little in the previous session following a 2% fall on Monday.
Energy major Reliance Industries, which has the highest weight in the main index, closed up 0.1% at Rs1,048.30.
Software services firm Wipro fell 0.7% after rising 1.3% in the previous session, but larger rivals Tata Consultancy and Infosys were up 0.9% and 0.5%, respectively.
In the broader market, gainers outnumbered losers in a ratio of 1.65 to 1, on a total volume of about 275 million shares.
The 50-share NSE index ended up 1.1% at 6,060.35 points.
The MSCI’s measure of Asian markets other than Japan added 0.9%, while Japan’s Nikkei was up 0.5%.
At 04:00 pm, the MSCI world equity index was up 0.2% and the emerging markets index firmed 0.7%.